Business upgrade cycle 'alive and well', says Dell

Michael Dell: There's an enormous opportunity to update the infrastructure

New chipsets and better operating systems are driving the corporate IT sector to refresh its hardware, according to Dell chief executive Michael Dell.

Dell said during his Citrix Synergy 2010 keynote that, while corporate spending had been cut during the recession, the huge savings that can now be made in power, space and operating costs are forcing companies to upgrade.

"You can do a 30 to one server consolidation. That's a 94 per cent cost reduction, and it's possible with three to four year-old servers," he said during a Q&A session.

"I've explained to the Secretary of Energy that there's an enormous opportunity to update the infrastructure and reduce consumption.

"Companies are spending a disproportionate slice of money on maintaining their hardware, and the idea is that they save that cost and invest it in growth."

Industries such as the financial services sector use upgrades in server technology as a competitive advantage, Dell said, but other sectors, such as retail, have a less pressing need to upgrade.

The launch of Windows 7, which Dell described as "the best we've ever had", was also important in cutting costs. Dell's internal and external help desk calls were greatly reduced with Windows 7 customers, he said.

The need for 4G is also compelling, according to Dell. While not mentioning the company's plans in the sector, it is clear that the current mobile data network is not able to handle the growing demand.

"The move to 4G is a pretty big leap. It's like the leap to Wi-Fi, which was major. We need this extra network capacity and [current networks] cannot supply it," Dell said.

Dell was optimistic about cloud computing security. Certain business applications, such as Salesforce, could be run securely in the public cloud, he said. While it would never be 100 per cent secure, public cloud access is " acceptable".

Finally, when asked about the iPad, Dell dodged a direct question on his company's plans in the tablet sector and confined himself to saying that there would be "a significant array of devices in many different form factors".

He does not see the market cannibalising other sectors, saying that applications and usage patterns are opening up new users.